Crude oil futures rally as US-Iran conflict deepens
Crude oil futures extended gains for the third straight session on Wednesday, rising Rs 105 to Rs 7,689 per barrel, as traders priced in mounting supply risks following another round of US strikes on Iran.
On the Multi Commodity Exchange (MCX), crude oil futures for July delivery rose Rs 105, or 1.38 per cent, to Rs 7,689 per barrel in a business turnover of 10,458 lots.
The August contract also went up by Rs 91, or 1.2 per cent, to Rs 7,665 per barrel in 8,798 lots on the MCX.
Traders said mounting geopolitical tensions in West Asia drove the latest gains after the US intensified its military operations against Iran, raising concerns over crude shipments through the Strait of Hormuz, a crucial artery for global oil trade.
Globally, Brent oil futures for the September contract gained $1.05, or 1.24 per cent, to $85.78 per barrel on the ICE; West Texas Intermediate (WTI) for August delivery rose nearly 1 per cent to trade at $80.03 per barrel on the NYMEX.
Analysts said crude oil prices strengthened in overseas trade after the US military launched a fourth consecutive day of strikes on Tehran’s military infrastructure and reimposed a naval blockade on vessels travelling to and from Iranian ports.
In a statement, the US Central Command (CENTCOM) said fighter aircraft, drones, and naval vessels struck Iranian missile and drone sites, naval capabilities, and coastal defence systems in a seven-hour operation aimed at degrading Tehran’s ability to threaten commercial shipping in the Strait of Hormuz.
CENTCOM said, “The strikes took place the same day US forces resumed the naval blockade against vessels transiting to or from Iranian ports and coastal areas”.
Later, Iran retaliated by launching strikes on US-linked military installations in Jordan and Bahrain, raising fears of a wider regional conflict.
Meanwhile, US President Donald Trump withdrew his earlier proposal to impose fee on ships transiting the strategic shipping lane after what he described as “highly productive conversations” with West Asia leaders.
However, Trump warned that Washington would expand strikes to target Iran’s power plants and bridges next week unless Tehran returned to the negotiating table.
Analysts said the collapse of the fragile ceasefire and continued military exchanges have heightened concerns over crude supplies from the Persian Gulf, keeping risk premiums elevated in global oil markets.
